What is accounting Why accounts required for construction Accounting principles Double entry book keeping Every financial transaction has two entries Why we need credit and debit Every transaction should be balance at the end of the accounting period Debit transaction should match with the credit transactions What is trial balance Trial balance is the test of make sure the all debit and credit entries are in balance What are the accounting standards GAAP generally accepted accounting principle IFRS international financial reporting standards IAS - international Accounting Standards What are the accounting principles Accrual concept Relevant transactions to be posted in the relevant period. Accounting equation = Capital= Assets liabilities Working capital = current assets current liabilities Accounting procedures Receivables - Received amount of cash Payables - payable money Accruals - are the adjustment for the revenues that have been earned, but nor been reported or expences that have been occurred but not posted. Pre payments paid in advance, relevant delivery not been done Trial balance all the credit and debit in individual accounts to be match and balance Ratio analysis - in order to check whether the organization is performing by the figures and indicators derive from the accounting statements Management account - for the managers purpose of the accounts Financial Accounts for the external and purposes of the external professionals to study, so the standards to be followed. These standards are to be audited and published their annul reports. Construction work in Progress ( CWIP) Contract value, work done, variation, claims, amount to be pay. Impairment - abortive works the current value of the work done in the past.

Financial Accounts Gathers financial informations for the preparation of financial statement such and P/L, Balance sheets Financial statement is to be audited and these are to be published Based on the financial standards Ratio Analysis Liquidity Current ration Current assets/ current liabilities ( Same as working capital ratio) Quick ratio = (current assets stocks)/current liabilities Profitability ROCE = Profit/ capital Gross profit ratio = Gross profit/ sales revenue Mark up ratio = Gross profit/cost of goods sold Net profit ratio = net profit/ cost of goods sold Efficiency Stock Turnover ratio = cost of goods sold/average stocks Fixed asset turnover ratio = Total sales revenue/fixed assets as per books Investment Capital Gearing ratio = Loans/share holders funds Dividend yield = dividend per share/market price per share Earnings per share = net profit/equity Profit and loss account Considers the revenue and expense Generates the profit Balance sheet Considers the assets and liability Short terms and long term Generates a balance of assets and liabilities Clearly shows working capital Owners equity will be include to balance the accounting equation https://www.nibusinessinfo.co.uk/content/interpreting-balance-sheet-figures